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Next Legislature should
assess gas price cap

THE ISSUE Governor Lingle has called again for repeal of Hawaii's gasoline price cap, which has been in effect for four weeks.

HAWAII has survived the first four weeks of its unprecedented gasoline price cap under the duress of Hurricane Katrina, and it is as controversial as it was before it went into effect. In the absence of other catastrophes, prices should stabilize before the Legislature returns in January, allowing a fair assessment of the new law.

Governor Lingle has renewed her call for repeal of the price ceiling, but that is unwarranted at this point. Ironically, the oil companies, which have used the combination of the hurricane and gas cap to increase prices to the skyrocketing limit, also want its repeal, indicating their desire to raise prices even higher.

The law pegs Hawaii's gas prices to those in New York, Los Angeles and the Gulf Coast, where Katrina crippled oil production and refining facilities, driving up prices. Hawaii should have been unaffected by the hurricane since its source of crude oil is mainly Asia and Alaska. Prices went unchanged or dropped slightly in Chicago and other market-driven parts of the country close to refineries or receiving fuel imported from Europe.

Lingle has called for more disclosure of the oil companies' actual costs and wholesale prices, a reasonable point reiterated in a recent op-ed column by John E. Cole, executive director of the state Division of Consumer Advocacy. Cole had been a policy analyst for Lingle after serving as staff attorney for House Majority Leader Marcus Oshiro and his predecessor, now-U.S. Rep. Ed Case, both strong proponents of the gas cap.

Hawaii can find some solace in the fact that higher gas prices are a nationwide problem, in contrast to past decades when the state's oil oligopoly, protected from the effects of supply and demand, made Hawaii's prices uniquely high. The gas cap was intended to bring Hawaii's prices into consistency with mainland market forces.

Reflecting the concern over gasoline prices, President Bush asked Americans yesterday to conserve gasoline and avoid nonessential driving. Reminiscent of cardigan-sweater-clad President Jimmy Carter's comical plea to citizens nearly 30 years ago to turn down their thermostats, Bush provided little substance to support his call for conservation.

The Bush administration has proposed rules requiring light trucks, which include minivans and most sports utility vehicles, to be more efficient, increasing the standard of 21.2 miles per gallon to 22.2 mpg by 2007. The proposal fails to include sedans, which would remain at 27.5 mpg, or monster SUVs such as the Hummer H2, which gets between 10 and 13 mpg.

A better proposal, introduced in Congress, would require an increase in fuel efficiency of sedans and light trucks to 33 mpg in the next decade. The bill essentially would eliminate the SUV loophole.

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